Select the correct statement regarding relevant costs and revenue-to be relevant, a cost or revenue must be future-oriented and must differ between the alternatives - sunk costs are relevant for decision-making purposes-differential revenues are expected future revenues that do not vary between the alternatives under consideration

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Business

Cruella

18 September, 20:25

Select the correct statement regarding relevant costs and revenue-to be relevant, a cost or revenue must be future-oriented and must differ between the alternatives - sunk costs are relevant for decision-making purposes-differential revenues are expected future revenues that do not vary between the alternatives under consideration

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Steve Walsh · Answer 1

Answer: The correct statement is "to be relevant, a cost or revenue must be future-oriented and must differ between the alternatives".

Explanation: A sunk cost is a cost that has already been incurred and cannot be avoided, regardless of the manager's decision, so it is not relevant.

Differential revenues are those that do vary between the alternatives under consideration.

Relevant cost or revenues must differ between the alternatives,

Relevant cost or revenues are those expected entries or exits of money that differ between alternative courses of action. They are future and disbursable costs. if a cost will be the same regardless of the decision made, the decision has no effect on the cost and can be ignored.